Clause 13.3 Variation Procedure [FIDIC Yellow Book 1999]

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Table of Contents

Variation Procedure Overview

The Variation provisions in Sub-Clauses 13.1 and 13.3 allow for a Variation to be initiated either by a request to the Contractor to submit a proposal or by an instruction. Sub-Clause 13.3 specifically outlines the procedure and related requirements for Variations. The first two paragraphs of this Sub-Clause pertain to proposals submitted in response to a request, the third paragraph relates to instructions, and the final paragraph establishes the basis for valuing the Variation.

Request for a Proposal: Sub-Clause 13.1 in the FIDIC forms empowers the contract administrator to explore the feasibility of a Variation by requesting the Contractor to submit a proposal. This procedure provides the contract administrator an opportunity to gauge the potential implications of a Variation before committing to it.
Instruction for Variation: If there’s any dispute about whether an instruction constitutes a Variation, it’s recommended to refer the matter to the DAB (Dispute Adjudication Board) as soon as possible for a decision.
Valuation of Variations: Unless the Contractor’s proposal has been approved by the contract administrator under Sub-Clause 13.3, the Variation is to be valued according to the final paragraph of Sub-Clause 13.3.
Definition of Variation: In the FIDIC forms, a “Variation” is any change to the Works, which is instructed or approved as a variation under Clause 13.

Key Elements and Detailed Explanation

1. Initiation of Variation

Overview: This is the starting point of the variation process. It involves identifying the need for a change or adjustment in the construction project.
Details: Before any variation can be implemented, it must first be identified and initiated. This can arise from various reasons, such as unforeseen site conditions, changes in design, or client requirements.

2. Engineer’s Role

Overview: The Engineer plays a central role in the variation procedure.
Formulate Proposed Scope: The Engineer is responsible for defining the scope of the proposed variation. This includes detailing what changes are required, why they are necessary, and how they will impact the project.
Review Contractor’s Proposals: Once the Contractor submits their proposals for the variation, the Engineer reviews them to ensure they align with the project’s objectives and requirements.

3. Contractor’s Role

Overview: The Contractor is tasked with executing the variations as per the instructions.
Provide Detailed Execution: The Contractor outlines how they plan to execute the variation. This includes methodologies, resources, and timelines.
Assess Effect on Programme of Works: The Contractor evaluates how the proposed variation will impact the overall project timeline and milestones.
Submit Pricing Proposal: Based on the scope and execution plan, the Contractor provides a detailed pricing proposal, outlining the costs associated with the variation.

4. Approval Process

Overview: Before any variation is implemented, it requires a thorough review and approval.
Engineer’s Review: The Engineer conducts a review of the Contractor’s proposals, assessing their feasibility, cost implications, and alignment with the project’s goals.
Employer/Financing Agency Approval: The variation requires approval from the Employer or the Financing Agency. This ensures that the variation aligns with the project’s budget and financial constraints.

5. Implementation of Variation

Overview: Once approved, the variation is implemented.
Details: This involves executing the changes as per the approved proposals, ensuring they meet the project’s quality standards and objectives.

6. Interaction with Other Clauses

Overview: Clause 13.3 Variation Procedure does not operate in isolation. It interacts with various other clauses in the FIDIC Yellow Book 1999.
Details: For instance, it interacts with Sub-Clause 3.1, Sub-Clause 4.6, and others to ensure that variations are treated, valued, and implemented appropriately.

Implications

Potential for cost and time adjustments.
Need for clear communication, accurate cost and time evaluations, and coordination among stakeholders.
Requirement for timely notification, proper evaluation of the variation’s impact, and negotiation of adjustments in terms of scope, time, and cost.
Accurate measurement, evaluation, and pricing of variations.
Ensuring that clear documentation, approvals, and notifications are in place for any changes.

Relevant Illustrations and Case Studies

Scenarios where changes in project scope or design result in modifications to the contract.
Instances where a well-implemented variation procedure resulted in successful project outcomes.
Situations where the contractor dealt effectively with variations through adherence to the procedure.
Cases where the variation procedure assisted in resolving disputes over quantification and valuation of changes.
Scenarios where effective administration of variations led to smooth project execution and minimized disputes among the parties involved.

The interaction of Clause 13.3 Variation Procedure with other clauses in the FIDIC Yellow Book 1999 is as follows:

Sub-Clause 3.1: Instructions from the contract administrator following the Contractor encountering unforeseeable physical conditions. If such an instruction constitutes a Variation, Clause 13.3 applies.
Sub-Clause 4.6: Unforeseeable cost of cooperating with the Employer’s Personnel, other contractors, and public authorities, as instructed by the contract administrator. If there’s a change in applicable standards in force in the Country after the Base Date, a Variation in accordance with Clause 13.3 is applicable.
Sub-Clause 4.12: If the effect of any instruction changes the Works or the Employer’s Requirements, Clause 13 will apply. The Contractor’s entitlement to payment for executing the Variation will be governed by Sub-Clause 13.3.
Sub-Clause 5.4: Instruction to submit additional samples is treated as a variation under Clause 13.3.
Sub-Clause 7.2: Instruction for additional or amended tests (where results show no default) or delayed tests falls under Clause 13.3.
Sub-Clause 11.2 (12.2 (G)): Correcting defects found in the Employer’s Requirements notified within the period stated in the Appendix to Tender/Contract Data. Clause 13.3 may apply in this context.
Sub-Clause 17.1 (17.10 (G)): This clause interacts with Clause 13.3 in terms of entitlement to ‘additional payment under any Clause of the Conditions’.
Sub-Clause 3.3 (3.4 (S)): If an instruction given under this sub-clause constitutes a Variation, Clause 13 applies. Even if the instruction is stated to have been given under Sub-Clause 3.3 (3.4 (S)) and not Sub-Clause 13.1, it will constitute a Variation.

From the above interactions, it’s evident that Clause 13.3 plays a pivotal role in the FIDIC Yellow Book 1999, especially when it comes to variations and adjustments in the contract.

Insight about interaction of Clause 13.3 Variation Procedure

Clause 13.3 Variation Procedure is a fundamental tool for effective project management. Its collaboration with other clauses, such as Clause 3.3 Change in the Works, ensures that variations are appropriately documented and approved. This interaction helps maintain project continuity and safeguards both the employer’s and the contractor’s interests.
The interaction between Clause 13.3 Variation Procedure and other clauses is vital for transparent and consistent decision-making. By defining how variations are treated and valued, it offers a streamlined process that minimizes potential disputes and delays.
From a financial perspective, the variation procedure in Clause 13.3 influences the contract’s economic aspects. Its interaction with clauses like Clause 3.5 Determination ensures variations are correctly valued and accounted for, allowing for precise cost forecasting and risk management.
On the human relations front, the interaction between Clause 13.3 Variation Procedure and other clauses impacts the relationship between the employer and the contractor. By outlining the process for managing variations, it establishes a framework for effective communication and collaboration, fostering trust and minimizing conflicts.
Ethically, Clause 13.3 Variation Procedure plays a pivotal role in upholding standards within the contract. Its interaction with clauses related to dispute resolution, such as Clause 20.2 Amicable Settlement, ensures fair treatment and equitable outcomes, promoting integrity and accountability in the construction industry.

When employing Clause 13.3 Variation Procedure in the FIDIC Yellow Book 1999, the main points to keep in mind are:

Understanding the Procedure: Familiarize yourself with the specific procedures outlined in the clause. This includes the steps to initiate a variation, the documentation required, and the approval process.
Communication and Coordination: Ensure proper communication with all involved parties. This includes discussing potential variations with stakeholders, assessing the feasibility of the variation, and coordinating with other departments for seamless implementation.
Impact Assessment: Consider the potential impact of the variation on the project timeline and resource allocation. This involves evaluating how the variation might affect the project’s completion date, the resources required, and any potential delays.
Financial Considerations: Monitor the costs associated with the variation closely. This includes tracking any additional expenses or reimbursements resulting from the variations and analyzing their impact on the overall project budget.
Employee Awareness: Ensure that relevant staff members are aware of and understand the Variation Procedure outlined in Clause 13.3. If necessary, provide training or resources and maintain clear communication lines between project managers and employees involved in implementing variations.
Ethical Considerations: Reflect on the ethical implications of implementing the variations outlined in Clause 13.3. Ensure that any changes are transparent, fair, and comply with both legal and ethical standards. Regularly review and assess the procedures to prevent potential conflicts of interest or unethical practices.

Insights and Real-World Instances

Variation Procedure Role of the Engineer: The Engineer plays a central role in administrating Variations. Initially, the Engineer formulates the proposed scope of the Variation and requests the Contractor to provide a detailed execution description, its effect on the Programme of Works, and a pricing proposal for the Variation evaluation.
Contractor’s Proposals: The Contractor can make his own proposals for the Engineer’s consideration. However, there might be hesitancy, especially if significant costs, including design costs, are incurred, which won’t be reimbursed if the proposals aren’t adopted.
Drawings and Variations: Drawings issued to the Contractor for construction purposes can sometimes contain requirements that are Variations but might not be readily recognized as such. Dialogue between the Engineer and the Contractor is essential to determine whether a change to the drawings corresponds to a Variation under the Contract.
Approval Process: Contractors often assume that any Variation issued by the Engineer has undergone prior scrutiny and approval by the Employer. In many contracts, additional wording is included in the Particular Conditions of Contract, stating that the Engineer needs the Employer’s consent before issuing a Variation. Given that a Financing Agency might also need to scrutinize the Variation, the total approval system can become extended, introducing uncertainty into the process for Variations and potentially delaying the Works’ execution.

These insights provide a deeper understanding of how Clause 13.3 Variation Procedure operates in real-world scenarios and the challenges that might arise.

Flowchart for Clause 13.3 Variation Procedure

Detailed Explanation:

Start: Receive Variation Request: The process begins when a request for a variation is received.
Check if Variation is initiated by instruction or proposal: Determines the source of the variation request, either from the Engineer/Employer or the Contractor.
Refer to Sub-Clause 13.1: If initiated by instruction, the process follows the guidelines in Sub-Clause 13.1.
Refer to Sub-Clause 13.3: If initiated by a proposal from the Contractor, the process follows Sub-Clause 13.3.
Execute Variation as per instruction: If the variation is based on an instruction, it is executed accordingly.
Submit proposal for Variation: If based on a proposal, a detailed proposal is submitted by the Contractor.
Value the Variation according to Sub-Clause 13.3: The value of the variation is determined as per Sub-Clause 13.3.
Is there a dispute?: Checks if there is a dispute regarding the variation or its valuation.
Refer to Clause 3.5 for Determinations: If a dispute arises, Clause 3.5 is invoked for formal determinations. This is highlighted in pink.
Refer to DAB under Sub-Clause 20.4: If the dispute is not resolved, it is referred to the Dispute Adjudication Board (DAB).
End: Variation Process Completed: The process concludes once the variation is executed, valued, and any disputes are resolved.

Request for Proposal Clause 13.3:
- The process begins with a formal request for a proposal under Clause 13.3. This is typically initiated by the Engineer when there’s a need for a variation in the works.
Engineer formulates proposed scope:
- Based on the identified need, the Engineer formulates a proposed scope for the variation. This outlines the specific changes or modifications required in the project.
Contractor provides:
- Upon receiving the proposed scope, the Contractor is expected to provide:
  - Detailed execution description: A comprehensive description of how the Contractor plans to execute the proposed variation.
  - Effect on Programme of Works: An assessment of how the variation will impact the overall project timeline and milestones.
  - Pricing proposal for evaluation: An estimation of the costs associated with implementing the proposed variation.
Engineer’s Review:
- The Engineer reviews the details provided by the Contractor. This review ensures that the proposed execution aligns with project standards and that the cost estimations are reasonable.
Approval by Employer/Financing Agency:
- If the Engineer is satisfied with the Contractor’s proposal, it is then forwarded for approval by the Employer or any involved Financing Agency. This step ensures that the proposed variation aligns with the project’s financial and strategic objectives.
Engineer Disapproves Proposal:
- If the Engineer is not satisfied with the Contractor’s proposal, they might disapprove it. This could be due to various reasons,

Here’s a mindmap illustrating the Clause 13.3 Variation Procedure and its relationship with other clauses: